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A muted reopen for T-Notes, -0-03+ at 134-18, operating around late NY levels.

  • To recap, the bid that was seen during European hours-early NY dealing (resulting in fresh multi-month lows for 5- to 30-Year yields) faded as we moved through the day, with the cash Tsy curve twist steepening as benchmarks out to 5-Years richened by ~2.0bp, while the longer end of the curve cheapened by ~5.5bp.
  • The by now familiar risk-off factors supported the space ahead of NY hours, with softer than expected building permits data also feeding in during early NY dealing. That was before the S&P 500 rallied from worst levels of the day to finish ~1.50% higher, unwinding Monday's losses. There was little in the way of outright drivers seen re: equities, with the Tsy space snapping back alongside the equity rally. Note that J.P.Morgan moved their end of 21 EPS & price target for the S&P 500 higher. The stronger USD likely fed into the strengthening of the domestic equity markets. Longer dated swaps ran wider on the day, feeding into the cheapening that kicked in during NY hours, with an uptick in $ corporate issuance eyed.
  • There is nothing in the way of tier 1 risk events slated for Asia-Pac hours on Wednesday. Looking ahead, 20-Year Tsy supply and fiscal matters on the Hill are set to dominate during NY hours on Wednesday.